V.K. Jayakar
Asst. Legal Adviser

In this write-up, judgements of the Courts of law are discussed, in which the issue examined was whether the superannuation dues, namely provident fund and gratuity payable to legal heirs of a deceased employee can be the subject matter of attachment by a Court in the execution of a decree.

Section 60(1) of the Code of Civil Procedure enumerates various items of property which shall not be liable to attachment and sale in execution of a decree. Clause (g) of Section 60(1) mentions stipends and gratuities allowed to pensioners of the Government or of a local authority or of any other employer or payable out of any service family pension fund notified in the Official Gazette by the Central Government or the State Government in this behalf, and political pensions. Further, Clause (k) of Section 60(1) specifies all compulsory deposits and other sums in or derived from any fund to which the Provident Funds Act, 1925, for the time being applies in so far as they are declared by the said Act not to be liable to attachment. Thus, in terms of the said Clauses (g) and (k) of Section 60(1), gratuity and provident and payable to employees are exempt from attachment.

Section 13 of the Payment of Gratuity Act, 1972, provides that no gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under Section 5 shall be liable to attachment in execution of any decree or order of any Civil, Revenue or Criminal Court.

Section 3(1) of the Provident Funds Act, 1925 provides that a compulsory deposit in any Government or Railway Provident Fund shall not in any way be capable of being assigned, or charged and shall not be liable to attachment under any decree or order of any Civil, Revenue or Criminal Court in respect of any debt or liability incurred by the subscriber or depositor, and neither the Official Assignee nor any receiver appointed under the Provincial Insolvency Act, 1920 shall be entitled to, or have any claim on any such compulsory deposit. Further, sub-section (2) of Section 3 protects any sum standing to the credit of any subscriber from attachment in case he dies and it is payable to any dependent of the subscriber. This is subject to three conditions, viz., (i) deductions permissible under the Act may be made, (ii) the dependent should be the widow or child of the subscriber or depositor and (iii) the rights of an assignee under an assignment made before the commencement of this Act are protected. Thus, any sum standing to the credit of a subscriber shall vest in the dependent free from any debt or other liability incurred by the deceased or incurred by the dependent before the death of the subscriber.

(D) Employees' Provident Funds & Miscellaneous Provisions Act, 1952

In terms of Section 10(1) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the amount sanding to the credit of any member in the Fund shall not in any way be capable to being assigned or charged and shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the member and neither the official assignee appointed under the Presidency-towns Insolvency Act, 1909, nor any receiver appointed under the Provincial Insolvency Act, 1920, shall be entitled to, or have any claim on, any such amount. Further, in terms of sub-section (2) of Section 10 any amount standing to the credit of a member in a provident fund at the time of his death and payable to his nominee under the Scheme or the rules of the provident fund shall, subject to any deduction authorised !by the said scheme or rules, vest in the nominee and shall be free from any debt or other liability incurred by the deceased or the nominee before the death of the member.

The appellant, the Union of India, had filed the above appeal, by special leave, against the order of dismissal in Civil Revision made by the Delhi High Court, upholding the view of the first court overruling the contention of the State, objecting to the attachment of certain provident fund and pension dues held by Union of India (on behalf of the Rajya Sabha Secretariat) in trust for the judgement-debtor who had been employed in the Rajya Sabha Secretariat.

The following is an extract from the judgement containing the important observations made by the Supreme Court regarding attachment of superannuation dues:

The appeal was allowed and the Court of the Subordinate Judge was directed to go into the merits of the objection raised by the Union of India as to whether the amount held by it on behalf of the judgement-debtor represents provident fund and compulsory deposits, excluded from attachability in execution of civil decrees under the relevant provisions of the Provident Funds. Act, the Pensions Act and the Civil Procedure Code.

Whether the amount of gratuity credited to the account of deceased employee is liable to attachment in execution of decree against deceased represented by legal heirs.

The petitioner had obtained a decree against one S.D. Cornelius, an employee of the G.I.P Railway Company, for the recovery of Rs. 2,600/- with future interest and costs. The judgement debtor Cornelius died in April, 1940 and the petitioner proceeded to execute the decree against his widow and legal representative, Mrs. Cornelius for the recovery of the amount by the attachment of the arrears of salary of Mr. Cornelius and other amounts in the hands of the Railway Company as the moneys due to him. The executing court held that the amount of gratuity credited in the account of the deceased judgement debtor was not liable to attachment under Section 60, sub-section (1)(g) Civil Procedure Code and the petition was dismissed. The Bombay High Court observed that the orders governing the grant of gratuities to subordinate staff of the G.I.P Railway Company as contained in Exhibit 37, and Rule 1 provides that the agent may grant at his discretion as a reward for good, efficient, faithful and continuous service, gratuities on retirement to subordinate railway employees or to their widows and children dependent on them. That rule adds that it must be understood that the grant of the gratuities cannot be claimed as aright. The Court referred to a decision in 25 Bom.L.R. 599 in which it was held that such a gratuity is in the nature of a gift and it is to be given at the discretion of the agent and cannot be claimed by the employee as of right. Even after the agent decides to pay the gratuity, the company does not ipso facto become a trustee for the employee in respect of that amount. It was argued that since the gratuity was credited to the account of Mr. Cornelius, this amounted to a completion of the gift by delivery of this amount. The Court observed that in this case the amount was not credited to any living person and there can be no delivery of moveable property to one who is dead. The company had to find out whether after death of the employee, there was any such person entitled to the gratuity, and till then the amount was credited to the account of the deceased for the sake of convenience. The Court observed that it does not mean that thereby the amount became a part of the Provident Fund account of the deceased or that the title to it passed either to the widow or to any other dependent of the deceased. The amount was not payable to the estate of the deceased employee.

The Court took the view that the amount still remained in the hands of the company and was not credited to the account of the person who was entitled to receive it. Therefore, the mere fact that it was credited to the account of the deceased employee does not amount to a delivery as contemplated by Section 123 of Transfer of Property Act. The Court held that hence, the amount of gratuity in the hands of the company was not liable to attachment.

Whether the amount of gratuity which was payable in respect of deceased employee is liable to attachment in execution of decree passed against legal heirs of the employee. The decree was executable only against the estate of the employee in the hands of his legal heirs.

The decree holder had filed a suit for recovery of money borrowed by the employee from him, against the legal heirs of the employee who had died. The suit was decreed. The decree holder filed execution application seeking attachment of dues of the deceased employee in the hands of his employer, Delhi Cloth & General Mills, which included provident fund and gratuity.

The Delhi High Court observed that Section 60(g) of the Civil Procedure Code provides that the provident fund and gratuities allowed to the pensioners of the Government or or a local authority or of any other employer are not liable to be attached in execusion of a decree. The gratuity in question was payable to the employee by his employer. If the employee had been alive he would have been definitely paid this gratuity and the same could not have been attached even if money decree was obtained against the employee. The Court observed that the question to be decided is whether with the death of the employee the nature of the said gratuity has changed in its character or it has to be termed as the gratuity still payable to the deceased.

The Court referred to the decision in Diwansingh vs. Kusimbai (1969 MPLJ, SN, 63) where the Madhya Pradesh High Court had held that the gratuity lying with the employer was attachable on the death of the employee as the amount becomes a debt payable by the employer to the legal heirs of the employee. Interpreting Section 60(g) of the C.PC., the Court opined that in terms of its provisions, only if the gratuity is payable to the employee then the same is not liable to be attached and that if the employee is dead, obviously the gratuity cannot be deemed to be payable to the employee. Hence, if the gratuity becomes payable to the heirs of the employee, the same becomes attachable in the hands of the employer since the employer is legally bound to pay the gratuity to the legal heirs. The Court was in complete agreement with the ratio laid down by the Madhya Pradesh High Court in the said judgement.

The Court held that after the death of the employee, the gratuity cannot be deemed to be payable to the employee and as the gratuity becomes payable to the heirs of the employee, it becomes attachable in the hands of the employer in execution of a decree.

5. Sathyavathy vs. Bhargavi (deceased), Vijayan & Another (AIR 1991 Kerala 377)

Issue

Whether once the gratuity amount becomes an asset of the deceased person, still it can be stated as gratuity amount and still that amount will retain the character of gratuity, so as to get exemption under Section 60(1)(g) of the Civil Procedure Code.

The petitioner who is the decree holder secured a money decree against the first respondent (since deceased) who had borrowed from him. The petitioner filed an execution petition for realization of the amount and wanted to attach the provident fund and gratuity amount due to the first respondent. The Court observed that admittedly the first respondent earned the gratuity amount but since she has died, the amount can be claimed only by the legal representatives as the asset of the deceased.

The Court observed that it is difficult to say that when the attachment was sought the gratuity amount is held by the employer in trust for the judgement - debtor, because now the judgement debtor is dead and no one can have property in trust for a dead person. The character of the property held by the employer can only be a debt to be paid to the legal representatives of the deceased. If the assets of the deceased came in the possession of the legal representatives of the deceased, the properties are liable to be attached. The Court referred to and relied upon the decision in Diwansing vs. Kusimbai reported in 1969 MPLJ, 63.

The amount due as gratuity to deceased employee/ judgement debtor and payable to his legal representatives is not exempt from attachment under Section 60(1)(g) of the Civil Procedure Code.

6. Thomas George vs. Soudamini & Others (Indian Law Reports 1997 (1) 364)

Whether the amount of provident fund contribution of the subscriber and held in deposit by the State Bank of India where the subscriber was employed is exempt from attachment, under Section 60(1)(k) of the Code of Civil Procedure.

Observations of Court

An employee of State Bank of India (since deceased) had borrowed money from the appellant/decree holder. The appellant moved the lower court for attachment of a sum of Rs. 50,000/ - held by the SBI, as amounts payable to the legal representatives from out of the provident fund of the subscriber. The Court below negatived the claim for attachment on the ground that Section 60(1)(k) of the Civil Procedure Code exempts from attachment the provident fund dues.

The Court observed that the amount sought to be attached represents the provident fund contribution of the subscriber and payable under the State Bank of India Employees' Provident Fund Rules to the dependents of the subscriber. The Court referred to the provisions of Section 3(2) of the Provident Funds Act, 1925 in terms of which any sum standing to the credit of the subscriber in any Provident Fund at the time of his death, subject to the deductions mentioned therein vests in the dependent(s), free from any debt or other liability incurred either by the deceased subscriber or by the dependent(s) prior to the death of the subscriber. The Court opined that there is a statutory vesting of the provident fund on the dependents after the death of the subscriber under Section 3(2) of the said Act which on such vesting becomes the absolute property of the dependents and cannot be regarded as assets of the deceased subscriber in the hands of the dependents. Such amount is free from any liability from being attached.

The Court took the view that the provisions contained in Section 60(1)(k) of the CPC is one conceived in public interest and the refusal to order attachment of the sum standing to the credit of the deceased subscriber cannot be held to be invalid. This is a pointer of the legislative intent in Section 3(2) of the said Act that the amount in question is immune from attachment. The Court relied upon the decisions in Abdul Waheedkhan vs. Laliben Bheinabhai (1992, 1, Cur. L.R.164). The Court observed that the consensus of judicial opinion whether it be under the said Act or under the 1952 Act is that the Provident Fund amount is completely immune from attachment under any decree or order of a Civil Court.

The Court held that the provident fund amounts standing to the credit of the subscriber on his death gets vested on his dependents and the same is immune from any liability for attachment for the debt incurred by the subscriber.

(i)   Whether the provident fund amount which vests in the widow of the deceased subscriber is liable for attachment for debt incurred by her before the death of the subscriber.

(ii)   Whether the benefit conferred by the P.F. Act,1925 as to the immunity from attachment of the P .F. so long as it stands to the credit of the subscriber can be waived by the person on whom the benefit has been conferred.

The appellant/decree-holder in execution proceeding applied for attachment of the provident fund dues belonging to the deceased Mrs. Reny Charles, the judgement debtor and payable by her employer Southern Railway. The Southern Railway filed objections to the effect that since the statutory provisions give immunity to provident fund from attachment, the attachment is contrary to the provisions of law and is void. The Court of Civil Judge as well as the first appellate court, the Court of District Judge held that the attachment was void under the provisions of Section 3 of the Provident Funds Act read with Section 60(k) of the Civil Procedure Code.

The High Court referred to the provisions of Section 3(2) of the Provident Funds Act, in terms of which any sum standing to the credit of the subscriber in any provident fund at the time of his death, vests in the dependent free from any debt or liability incurred either by the deceased subscriber or by the dependent prior to the death of the subscriber. The Court observed that the debt was due jointly by the husband and his wife and the attachment was effected prior to the date of decree for the joint debt. The attachment which was also effected before the death of the subscriber, for realization of dues payable by his wife and incurred before the death of her husband is clearly hit by the provisions of sub-section (2) of Section 3 of the P.F. Act, 1925.

Regarding the contention of the petitioner that the provident fund has ceased to be a provident fund after the death of the subscriber, the Court took the view that this contention cannot be supported either by any of the provisions of the P.F. Act or by any other authority. The Court observed that the words "until the happening of some specified contingency" in the definition of "compulsory deposit" under Section 2(a) of the P.F. Act of 1925 does not affect the protection extended to the provident fund after it becomes payable on the happening of the specified contingency, while it still stands to the credit of the subscriber.

The important observations of the Court are as follows:

The Court relied upon the decision in Graham vs. Ingleby (1845) 1-Ex-651, where it has been stated "that an individual cannot waive a matter in which the public have an interest". The Court was of the view that once it is clear that the prohibition against attachment is absolute and such prohibition is based on the public policy, then it is not permissible for any person to contract or agree that such a prohibition shall not operate on the provident fund standing to the credit of the depositor, and any such agreement being against public policy would be void in law.

The Court held that the provident fund so long as it stands to the credit of the subscriber is immune from the liability of attachment for the debt incurred by the wife, the dependant of the subscriber prior to his death. The Court further held that the contention of the appellant that it was open for the dependant of the subscriber to waive her right and agree to have the amount brought into the Court for payment to the decree holder in satisfaction of his decree, cannot be sustained. The appeal was dismissed.

Whether the amount of gratuity and provident fund of an employee adjudged as insolvent under the Provincial Insolvency Act, 1920 are liable to attachment for satisfying the dues of the creditors.

Observations of Court

Shri Dhiraj Kumar Bose, an employee of the Reserve Bank of India (since deceased) was adjudged as an insolvent by the District Judge Munger under the provisions of the said Act. One of the creditors filed an application before the Court for directing the employer to remit the provident fund, gratuity and other dues payable to, the insolvent to the Court. The Reserve Bank filed objections to the effect that the provident dues and gratuity were not liable to attachment in view of the provisions of Section 13 of the Payment of Gratuity Act, Section 3 of the Provident Funds Act and Section 60(1)(g) and (k) of the Civil Procedure Code. The District Judge by his order held that the gratuity and provident fund payable to the deceased was not liable to attachment. The creditor had filed this revision petition before the High Court against the said order.

The Court observed that it is an admitted position that the provisions of the P.F. Act, 1925 and Gratuity Act, 1972 are applicable in this case and referred to the relevant provisions which gives immunity from attachment. The Court pointed out that under Section 28(2) of the Provincial Insolvency Act after an order of adjudication is passed under the Act, all the property of the involvent shall vest in the Court or in a receiver, as the case may be. Further, sub-section (5) thereof provides that the property, which is exempt from attachment and sale in execution of a decree of Court under the provisions of the Code or by any other enactment at the time being in force, shall not be included in the property, which shall vest in the Court or in a receiver after jurisdiction.

The Court observed that a bare reading of the provisions contained in Sections 3 and 4 of the P.F. Act read with Section 60(1)(k) of the C.P.C. shows that the attachment of the provident fund amount is prohibited. The Court relied upon the decisions in Union of India vs. Radha Kissen Agrawalla reported in AIR 1969 SC 762 and Jyoti Chit Fund and Finance, reported in 1976,3 SCC, 607. In view of the aforesaid two judgements of the Supreme Court, it is clear that the provident fund is not liable to attachment so long it remains with the authority and is not paid to the employee, and once it is not liable to attachment, the same shall not be treated as a property of insolvent, which vests under Section 28(2) of the Provincial Insolvency Act.

Regarding gratuity, the Court relied upon the decisions in TISCO vs. Sultan Khan reported in AIR 1968, Patna 297 and held that only when gratuity is paid to the employee it becomes his property and as such, the Insolvency Court cannot attach the gratuity under the provisions of the said Act unless it is paid to the insolvent. Further, the Court referred to the provisions of Section 13 of the Gratuity Act and Section 60(1)(g) of the CPC and held that it gives total immunity to the gratuity from attachment in execution of a decree or order of a Court.

Once the gratuity and provident fund is not liable to attachment under the statutory provision, the same cannot be treated as a property of the insolvent having vested after adjudication in the Court or official receiver in view of the specific provision contained in Section 28(2) of the Provincial Insolvency Act.

Issue

The question to be decided was as to whether after the death of the employee, the plea of immunity from attachment in respect of gratuity is available to the legal heirs.

The degree holder had filed an application before the Small Causes Court, Bangalore for attachment of provident fund and gratuity payable to the legal heirs of an employee of Reserve Bank of India, Bangalore (since deceased). The Reserve Bank (garnishee) filed objections and opposed the application for attachment on the grounds that under Section 60(1)(g)&(k) of the Civil Procedure Code, Section 13 of the Payment of Gratuity Act, and Section 3 of the P.F. Act, the provident fund and gratuity are exempt from attachment and among other decisions, relied upon the judgement of Patna High Court in Ram Autar Agarwal vs. RBI. By its order dated 15th August 1999, the trial court rejected the application for attachment. Against the said order, the petitioner filed the above civil revision petition before the Karnataka High Court challenging the order so far as it relates to gratuity. The petitioner referred to the judgement of the Kerala High Court in Sathyavathy vs. Bhargavi (AIR 1991, Kerala 377) in support of his contention that gratuity payable to legal heirs is attachable.

The Court observed that in the case of gratuity, it is only the provisions of Section 60(1)(g) of the C.P.C. which are relevant. The Court relied upon the decision of Patna High Court in the case of Ram Autar Agarwal vs. Reserve Bank of India and Another wherein it was observed that Section 13 of the Gratuity Act gives total immunity to gratuity from attachment in execution of the order of the Court.

The Court held that the amount is lying with the Reserve Bank of India and therefore, at this stage, it cannot be directed that the Reserve Bank is entitled to credit the amount of gratuity to the decree holder. The Court further observed that the question whether after receipt of the amount by the legal heir, it will retain its character as gratuity is not adjudicated at this stage.

It can be seen from the aforesaid judgements, that in respect of provident fund amount payable to legal heir of a deceased employee, the Mysore High Court in Waheedkhan vs. Reny Charles, the Kerala High Court in George vs. Soudamini and the Patna High Court in R.A. Agarwal vs. RBI have held that the provident fund is immune from attachment. The Courts have mainly relied upon the provisions of Section 3(2) of the Provident Funds Act, 1925 in terms of which any sum standing to the credit of the subscriber in any Provident Fund at the time of his death, subject to the deductions mentioned therein vests in the dependants, free from any debt or other liability incurred either by the deceased subscriber or by the dependants prior to the death of the subscriber.

In respect of attachment of gratuity payable to legal heir of a deceased employee, there appears to be conflict of judicial opinion. The Patna High Court in R.A. Agarwal vs. RBI, Karnataka High Court in Udayakumar vs. M. Kumar and Bombay High Court in U.A. Sani vs. G.I.P. Railway have held that the gratuity is immune from attachment. Whereas, the Delhi High Court in Ramwati vs. Krishna Gopal and Kerala High Court in Sathyvati vs. Bargavi have held that the gratuity is attachable. While interpreting the relevant statutory provisions, the Courts have taken the latter view, mainly on the ground that only if the gratuity is payable to the employee, then the same cannot be attached, but if the employee is dead the amount becomes a debt payable by the employer to the legal heirs, it becomes attachable.

The said statutory provisions have been conceived in public interest and reflects the intention of the legislature to confer the benefit of immunity from attachment in respect of provident fund and gratuity. Accordingly, the decision of the Courts should be in conformity with legislative intent and public interest. The conflicting judicial view to the effect that gratuity payable to legal heirs is attachable can perhaps be attributed to the limited nature of the provisions in Section 13 of the Payment of Gratuity Act, 1972. In my opinion, a possible solution would be to include a new provision in Section 13 of the Payment of Gratuity Act, similar to the provisions of sub-section (2) of Section 3 of the Provident Funds Act, 1925 which specifically exempts from attachment the P.F. amount of a subscriber in the event of his death and it is payable to his dependants. Therefore, suitable amendment to the provisions of the Payment of Gratuity Act is called for.

Joseph Raj
Asst. Legal Adviser

I. State Bank of India vs. EK. Andrew & Another (JT 2001(3) SC 612)

The respondent was a permanent employee under the Bank of Cochin and was serving as a Deputy General Manager. While so continuing he was appointed as Chairman by virtue of a resolution of the Bank of Cochin on 18-6-1979 and that appointment was approved by the Reserve Bank of India as required under the Banking Regulation Act, 1949. The initial period of appointment as Chairman was two years but the same was extended for a further period of 3 years with effect from 12-3-1981 and thus it continued till 17-6-1984. However, while continuing in his capacity as chairman of Bank of Cochin a set of charges were brought against him and proceedings were initiated by Reserve Bank of India. Ultimately by order dated 2-4-1983, he was removed from the post of Chairman. Thereafter, the Bank of Cochin was amalgamated with the State Bank of India with effect from 9-8-1985.

The respondent approached the High Court with a prayer that he is entitled to be held an employee of the Bank of Cochin on the date the Bank stood amalgamated with the State Bank of India and therefore he is entitled to be posted against the post of Deputy General Manager under the State Bank of India. The High Court came to the conclusion that the respondent must be held to be a permanent employee of Bank of Cochin and had a substantive right against that post notwithstanding his appointment as Chairman for a fixed period. The Division Bench upheld the conclusion and the decision of the single judge and dismissed the appeal filed by the Bank. Being aggrieved by the order of the Division Bench, the appellant had filed this appeal.

It was argued' on behalf of the appellant that the very fact that the respondent was appointed as Chairman with the approval of the Reserve Bank of India ipso facto would indicate that he did not retain any lien against his substantive post of Deputy General Manager and therefore the High Court erred in law in issuing the impugned direction. In support of his contention the counsel has relied on a decision in the case of Dr.S.K. Kacker V. All India Institute of Medical Sciences and Others [JT 1996 (8) SC 513]. However, the Court observed that the decision in the above case will have no application to the present case where neither the order of appointment as Chairman, nor the provisions of the Banking Regulation Act, nor any rule of the Bank of Cochin holds that there is an automatic cessation from the substantive post of the employee the moment he is appointed as Chairman though for a fixed tenure. Further, it was argued on behalf of the appellant that even under the scheme of amalgamation, the respondent would not be entitled to get the job in question as it would depend upon the very scheme itself. However, the court did not accept this contention as it does not appear to have been urged either before the single judge or before the Division Bench.

The appeal was accordingly dismissed.

Three cheques were given to the appellant drawn on Bank of Baroda, Parliament Street, New Delhi for different amounts, amounting to Rs. 2,32,600/- in all. The cheques were returned when presented for encashment with the endorsement "payment stopped by the drawer". The trial court proceeded to hold enquiry under Section 202 of CrPC and thereafter took cognizance of the offence and directed issuance of process. The accused/respondent challenged the order by filing application under section 482 of the CrPC, inter alia, on the ground that the stoppage of payment by the drawer does not constitute an offence under section 138 of the N.I. Act, 1882. The petition was dismissed by the High Court. Thereafter the accused/respondent filed an application before the trial court for recalling the issuance of process which was also dismissed. The accused/respondent again filed an application under section 482 of the CrPC before the High Court, which was allowed. The complaint has preferred the present appeal against the said order.

Mere dishonour of a cheque would not give rise to a cause of action unless the payee makes a demand in writing to the drawer of the cheque for the payment and the drawer fails to make the payment of the said amount of money to the payee. The object of issuing notice indicating the factum of dishonour of the cheque is to give an opportunity to the drawer to make payment within 15 days, so that it will not be necessary for the payee to proceed against the drawer in any criminal action, even though the bank dishonoured the cheque. As the director of the company had signed the cheques, it was incumbent upon him to see that the payments were made within the stipulated period of 15 days. There is no dispute that he was not the Director of the company and he had not signed the cheques. So far as the criminal complaint is concerned, once the offence is committed, any payment made subsequent thereto will not absolve the accused of the liability of criminal offence. Once the offence of dishonour of cheque is committed and payment made subsequent thereto will not absolve the accused of the liability of criminal offence. A criminal proceeding could not be quashed on account of deposit of money in the court.

The Court set aside the impugned order passed by the High Court and directed that criminal proceedings be continued. The money which was deposited by the accused in the court may be refunded to the accused through his counsel. The Magistrate was directed to dispose of the proceedings at an early date.

III. Punjab Co-operative Bank Ltd. and Another - vs. Union of India and Others (AIR 2001 P & H)

Banking Regulation Act, 1949 Section 45(2) - Imposition of moratorium and preparation of draft scheme by Reserve Bank of India for amalgamation of bank in question with another bank- Writ Petition, against - Objections against orders also filed before Reserve Bank of India - Dismissal of - Special leave Petition also dismissed with the observation that bank would be entitled for post decisional hearing - Subsequent order of amalgamation of bank passed by Central Govt. - Objection filed as aforesaid considered by Central Govt. - No violation of principles of natural justice on the ground of absence of giving fresh hearing to bank - Constitution of India Art 14.

On 30-9-96 the Ministry of Finance, Dept. of Economic Affairs (BD) of the GOI imposed moratorium on the Punjab Co-operative Bank Ltd. and the Bari Doab Bank Ltd. from transacting any business for a period of 3 months, which was subsequently extended for another 3 months. On 7th April, 1997 the GOI rejected the objections filed by the two banks against the imposition of moratorium and the scheme of merger etc. By another notification, the Central Govt. sanctioned the scheme put up by the Reserve Bank of India for amalgamation of the two banks. The Bari Doab Bank Ltd. had challenged the orders of moratorium passed by the GOI as also the two notifications. The Writ Petition was dismissed. The Special leave Petition filed by Bari Doab Bank Ltd. was also dismissed. However, the Punjab Co-operative Bank Ltd. through its Director Shri Shiraj Raj as also Shri Shiraj Raj in his capacity as director of the Bank filed this petition under Article 226 of the Constitution of India.

The short question which falls for consideration is - Have the respondents acted in violation of the principles of natural justice?

The Petitioner bank and Bari Doab Bank are placed in an indentical situation.The orders passed in case of both the bankers are one. The decision in one of the two cases has already been affirmed by the Supreme Court by dismissing the SLP. In view of this, it appears to be no infirmity in the order passed by the Division Bench in the Writ Petition.. Hence, the action in the present case also is not violative of the principles of Natural Justice. The petitioners were afforded a due and reasonable opportunity.

Petition dismissed accordingly

IV. Satish Kumar Sharma vs. Bar Council of Himachal Pradesh (AIR 2001 SC 509)

The appellant, a law graduate was appointed as Law Officer by the Himachal Pradesh State Electricity Boarding in 1978. In 1984, the Respondent issued a certificate of enrolment to him. However, in 1993 the respondent called upon the appellant to appear before the committee alongwith all connected documents. Thereafter a show cause notice was issued to the appellant requiring him to explain as to why the enrolment issued to him be not withdrawn. Finally in the meeting held on 12-5-1996, the respondent passed a resolution unanimously withdrawing the enrolment of the appellant with immediate effect and directed him to surrender the enrolment certificate and under Rule 49 of the Bar Council of India Rules, 1975. He was also debarred to be an Advocate. It was contended that the respondent had no jurisdiction to withdraw the enrolment certificate granted to the appellant.

The main and opening para of Rule 49 of the Bar Council of India Rules, 1975 prohibits an Advocate from being a full time salaried employee of any person, Government, firm, Corporation or concern so long as he continues to practice and an obligation is cast on an Advocate who takes up any such employment to intimate the fact to the concerned bar council and he shall cease to practice so long as he continues in such employment. The bar created under para 1 of Rule 49 will not be applicable to Law Officers of the Central Government, State Government, any public corporation or body constituted under a statute if they are given entitlement under the Rules of their respective State Bar Council.

No rules were framed by the respondent entitling a law officer appointed as a full time salaried employee coming within the meaning of para 3 of Rule 49 to enroll as an Advocate. Such an enrolment has to come from the Rules made under Section 28(2)(d) read with Section 24(1) (e) of the Act. Hence, if there is no rule in this regard, there is no entitlement. In the absence of an express or positive rule, the appellant could not fit in the exception. If he is not acting or pleading on behalf of his employer, then he ceases to be an Advocate. If the terms of engagement are such that he does not have to act or plead but does other kinds of work, then he becomes a mere employee of the Government or Body Corporate. The expression 'Advocate' is one who actually practices before the courts which expression would include even those who are law officers appointed as such by the Government or Body Corporates. Unless a concerned State Bank Council has framed rules entitling law officers to enroll as an Advocate even though they are full time employees, they are not entitled to enrolment. In the light of the facts of the case, the enrolment of the appellant is contrary to Rule 49 of the Bar Council of India Rules, 1975 and he is not at all entitled for enrolment. The duties, nature of work and service conditions of the appellant are substantially different from the duties and nature of work of prosecutors and Government Pleaders particularly in relation to acting and pleading in Court. Thus, the appellant stood on a different footing.

The appeal is dismissed accordingly.

Labour Law - Pay Parity in Regional Rural Bank sponsored by U.P. Cooperative Bank Ltd. - Type of parity in pay for officers and employees accepted by National Industrial Tribunal in its award dated 30-4-1988 - NIT applied the principle of parity with the officers of the sponsor bank concerned and not the principle of equal pay for equal work - Recommendation of Equation Committee appointed by Central Government for equating them with officers of the sponsor bank concerned i.e. U.P. Cooperative Bank and not with the employees of nationalised banks or commercial banks, is valid and consistent with NIT's direction. Concepts of `Parity with others' and 'equal pay for equal work' are different - Recommendation of equation committee for parity of pay of employees of Regional Rural Banks with the pay of employees of sponsor banks concerned and not with the sponsor banks of other rural banks is constitutional.

The appellant is a Regional Rural Bank, established u/s 3 of the Regional Rural Banks Act, 1976 and sponsored by the U.P. Cooperative Bank Ltd., Lucknow which is a society registered under the U.P. Cooperative Societies Act. Out of the 196 Regional Rural Banks in the country, 195 banks are sponsored by the nationalised banks and it is only the appellant bank which is sponsored by the U.P. Cooperative Bank. The employees of the Regional Rural Bank filed writ petitions seeking parity in respect of pay, salary allowances and other benefits with the employees of the nationalised banks in corresponding or comparable posts. The writ petitions were disposed of as the Central Government agreed to appoint a National Industrial Tribunal to decide the question. The Tribunal opined that it is a matter which has to be decided by the Central Government in consultation with such authorities as it may consider necessary. In view of the observations of the Tribunal the Government of India constituted a committee called the Equation Committee and referred the award to the committee seeking for a report in the matter of equation. On the basis of the recommendations of the committee, the Central Government, in exercise of the powers under the second proviso to section 17(i) of the Regional Rural Banks Act, 1976 issued certain directions whereunder the Branch Manager's post has been equated to the post of Asstt. Manager of U.P. Cooperative Bank Ltd. and the scale of pay for the latter post was also made applicable to the former post. The High court of Allahabad set aside the said direction and held that the employees of the appellant Bank would be entitled to the scale of pay of the employees of nationalised banks. Further, it was held that the decision of the Equation Committee was contrary to the decision of the Supreme Court relating to the principle of `equal pay for equal work' as also discriminatory. Against the said order, the Kshetriya Kisan Gramin Bank filed the appeal before the Supreme Court.

The High Court passed the impugned judgement without properly applying its mind to the relevant conculsions of the Tribunal as well as the very basis on which the Equation Committee discharged its obligation of doing the job of equation and erroneously, came to the conclusion that since the nature of job performed by the employees of the appellant Bank is not dissimilar to that being performed by those sponsored by commercial or nationalised banks, a difference of pay scales and other benefits would tantamount to discrimination. The aforesaid conclusion is wholly misconceived and in utter disregard of the finding of the Tribunal as well as the Principles of Act 14 of the Constitution.

The concept "equal pay for equal work" and the concept of "claim of parity with some others" are two different concepts and the conclusions of the High Court having been based on a misreading of the findings of the Tribunal, the said conclusion is vitiated and must be set aside. The conclusion of the High Court that the Equation Committee erroneously equated the Branch Managers of the appellant Bank with the Asstt. Managers of other banks is also a conclusion not based upon any rational basis and High Court was fully in error in applying the pay structure of the Regional Rural Banks sponsored by the nationalised banks to the pay structure of the appellant bank which was sponsored by UP Cooperative Bank.

The judgement of the Allahabad High Court is set aside and the appeal is allowed. The employees of the appellant bank would get their pay structured as per the report of the Equation Committee which was duly accepted by the Government.